Civil servants face 50% rent hike

The government plans to raise rents for apartments built for public servants by 50 percent on average, sources said Tuesday.

The rent for public servant housing is lower than for regular apartments, and the system is often criticized as an example of favorable treatment of government workers.

In addition, the government is set to up income and residential taxes to help pay for rebuilding the Tohoku region devastated by the March 2011 quake and tsunami. In addition, the 5 percent consumption tax will be raised to 8 percent in April 2014 and to 10 percent in October 2015.

The rent hike plan will be announced later this month.

The government is cutting salaries of national civil servants by an average of 7.8 percent in fiscal 2012 and fiscal 2013 to help pay for the Tohoku reconstruction.

After the pay cuts, the government will raise the apartment rents in three stages starting in April 2014, aiming to achieve the 50 percent hike by April 2018 at the earliest, the sources said.

According to a 2010 government survey, the average rent for a 55- to 70-sq.-meter apartment for rank-and-file government workers was ¥18,362 a month, compared with ¥21,513 for company housing for private businesses. Higher-ranking government officials paid an average ¥32,501 for a 70- to 80-sq.-meter apartment, compared with ¥23,056 for company housing.

Last December, a team set up by the Finance Ministry announced plans to scrap 56,000 of 218,000 housing units for national civil servants, or about 25 percent, by fiscal 2016.

The plans included canceling a project to construct new apartments for public servants in Suginami Ward, Tokyo, and Asaka, Saitama Prefecture.

In addition, the team proposed raising the rents for existing apartments and called on the government to reach a conclusion within one year.

The ministry will announce a list of housing that will be scrapped along with the rent hike plan, the sources said.